Beaufort County Council approves property tax increase in split vote

The Beaufort County Council voted Monday to cut a previously approved property tax increase in half after squashing an amendment to roll back the hike further.

The 6-4 vote followed objections from councilmen that the school board was passing on greater costs to taxpayers instead of dipping into $788,000 in reserve funds as originally proposed.

The school board budget approved in June, which was based on more conservative state revenue estimates, used a two-mil property tax increase and $788,000 in reserves to meet $177.9 million in expenditures.

The school board recommended reducing the two-mil increase to one mil and tapping $568,000 in reserves after securing an additional $1.6 million in Education Improvement Act funding.

Disagreement centered around the $220,000 difference in reserve spending, with Councilman Brian Flewelling of Burton proposing an amendment to reduce the one-mil increase to seven-tenths of one mil.

A one-mil property tax increase equates to an extra $6 per $100,000 of assessed value for non owner-occupied homes. Primary homeowners don’t pay for school operations under state law.

Chairman Weston Newton criticized the school board for going back on a promise to soften the property tax increase by as much as new state revenue allowed.

“I thought I understood then that we were going to lower millage to match revenues,” he said.

School Board Chairman Fred Washington Jr. argued the change is a proactive measure to avoid dipping below the 15 percent fund balance threshold called for by the district’s bond raters. If the school board continues to use reserve funds to meet budget shortfalls — as it’s done for the past four or five years — it jeopardizes its rating, he said.

“If we lose the bond rating, we end up paying more in interest,” he said.

Councilman Steven Baer of Hilton Head Island said the school board lost his sympathy when it ignored his recommendation to forego a $1.8 million iPad initiative to replenish the fund balance.

“You chose not to,” he said. “You chose to spend it on technology trinkets.”

Councilman Jerry Stewart of Sun City argued no tax increase or reserve spending is necessary if county assessors eclipse the 98 percent tax collection target and the school board “judiciously” manages funds while exploring other options.

Councilmen Stu Rodman and Paul Sommerville credited the school board with meeting a growing student population with an increasingly light staff, no millage increases in three years and declining revenue from secondary property owners. Both cautioned that the fund balance deserves attention in the coming years.

“I think this may be the calm before the storm,” Sommerville said.

The tax issue requires one more reading to be finalized.

Council also approved, amongst other items:

- A November referendum for Daufuskie Island voters to create a special tax district to raise money for the troubled ferry service. The petition to include the measure this election asks for an island commission to set a budget establishing user service charges and tax levels, which are capped at 16.5 mils. Results of the ballot measure would be non-binding and would still require County Council approval. A commenter attacked the exclusion of the Haig Point Club, which offers its own ferry service to residents, from the special tax district

- Authorization for the county to buy into the Lowcountry Economic Alliance for $10,000. Councilman Baer, arguing the council should develop its own development strategy rather than join an organization with an “unproven track record,” supplied the only dissenting vote. The organization lost about $600,000 in state matching funds when Jasper County abruptly withdrew and allegedly lobbied against the group in the statehouse.